Boeing (BA) revealed a much bigger-than-expected 29% increase in adjusted fourth-quarter earnings on Wednesday but its shares dipped in early trade on a disappointing full-year outlook.  

For fiscal 2014, the blue-chip aerospace giant predicts non-GAAP EPS between $7 and $7.20 and revenue in the range of $87.5 billion to $90.5 billion. Both are below average analyst estimates in a Thomson Reuters poll of $7.57 a share and $92.72 billion.  

Partly to blame is an expected decline in defense orders, which could weigh on margins in Boeing’s second-largest operating segment.  

Shares of Boeing were down close to 5% to $130.35 in recent trade, though they remain up more than 76% over the last 12 months.

The tepid outlook comes despite a solid fourth quarter, where the Chicago-based jet maker delivered net earnings of $1.23 billion, or $1.61 a share, compared with a year-earlier profit of $978 million, or $1.28. Adjusted fourth-quarter earnings were $1.88 a share, topping the consensus view of $1.57.

Revenue for the three-month period increased 7% to $23.8 billion from $22.3 billion a year ago, beating the Street’s view of $22.74 billion.

Commercial airplane deliveries increased 4% to 172, helping to boost revenues in that category to $14.86 billion. That improvement was led by the launch of the 777X and further investments in expanding the 787 program with the 787-9 and 787-10.

In its defense group, revenues were 6% higher to $8.8 billion despite what Boeing CEO Jim McNerney called a “tough operating environment.” However, that unit is expected to face further challenges this year.

"Strong fourth-quarter results underscored an outstanding full year of core operating performance that drove record revenue and earnings and increased returns to shareholders," McNerney said.

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